A thesis discussed at the University of Padua clarifies the links between the environmental compatibility of the economy and finance
A corporate culture that is also an environmental culture. “Industrial” products that are manufactured with a focus on the environment, with an awareness of the way in which they impact nature and their consequences that go “beyond profit”. This includes a sensitivity towards nature in entrepreneurs and managers. While still not a daily reality, these issues are taking on ever greater importance. We can gain a sense of what is currently happening by reading the thesis discussed by Pietro Acerbi at the M. Fanno Department of Economics and Business Sciences at the University of Padua.
“Investimenti ESG: la svolta sostenibile del settore finanziario” (ESG investments: the sustainable turnaround of the financial sector), makes its intentions clear right from the title: it is a study of the links between the financial component of the economy and environmental sustainability through investment.
The author explains: “Issues linked to climate change and the environment are playing an increasingly important role in every area of our lives, changing our choices and behaviours. Legislators and leading economic players can no longer ignore the devastating impact that the uncertainty linked to climate change is having on the world economy.” Up to this point, this summarises what any attentive observer already knows. Acerbi, however, builds on this, emphasising the crucial role that the “world of finance” has to play, as a “catalyst” responsible for guiding capital towards economic bodies that pay greater attention to environmental compatibility. The goal of Acerbi’s research, then, is to “investigate the new and growing link between the financial sector and environmental sustainability.” He goes on to say: “The overarching theme will be the decisions taken by various national and international institutions in order to implement the transition to a low-carbon and thus greener economy.”
His thesis builds upon an analysis of the Action Plan launched by the European Union, the first real step towards integrating environmental factors into the financial field. Following this, the research focuses on how the Bank of Italy is altering its investment choices in favour of selection criteria that take ESG factors into account – ESG stands for environmental, social and governance. The last section of the paper considers the response to climate change that may be supplied by the various monetary authorities – i.e. central banks – in the future, by means of the instruments of monetary policy.
Pietro Acerbi’s synthetic work succeeds in successfully and clearly illustrating a theme that is constantly evolving, in which cultural drivers are combined with more strictly economic motivations. It’s definitely worth a read.
Investimenti ESG: la svolta sostenibile del settore finanziario (ESG investments: the sustainable turnaround of the financial sector)
Thesis, University of Padua, M. Fanno Department of Economics and Business Sciences, Master’s in Economics, 2020